Letters from mortgage provider requesting info about how I plan to pay off mortgage

[billygoat24]

I have a 20yr mortgage which ends Nov 2027. Originally it was repayment mortgage, but I switched to interest only early on. I have no arrears and have never had any arrears. I received a letter and phone call requesting I inform them how I intend to pay off the mortgage at the end of the term. I received a couple of letters like this periodically several years ago, which I ignored. I have no repayment vehicle in place, but I'm confident I will either be able to repay the full amount or sell the property (although I have no way of proving this right now). I owe approx. 290K, the property is worth approx. 700K. In the event I do not have the funds to pay off the mortgage, I plan to make the decision to sell 2 years before the mortgage ends. What legal obligation do I have to provide evidence of a repayment vehicle to my mortgage provider at this stage? Also, what action can they take if I don't?

 

[Georgie Thew]

It would depend which lender you're with as some dont allow "sale of mortgaged property" as the repayment vehicle. Usually if the repayment type is anything else, they would ask on application for evidence. I would give them a call and let then know you plan to sell the property, if they question it, let them know nothing additional was asked for at application and see what they say. 

There are plenty of lenders who allow sale of mortgaged property as the repayment vehicle, so worth a chat with a broker when your due to remortgage. 

[Noel C]

Perfectly acceptable to say "Sale of property at the end of term". I have 3 properties, all on interest only. Never had an issue with a lender accepting that as a repayment vehicle. 

[barry hughes]

Is it acceptable or allowed to keep just refinancing whenever your 2 or five year term is up so lets say you have a 25 year old interest only mortage and after 5 years of paying interest only do you have the option just to refinance for another 25 or 30 years if you want or move to a different lender ho will do that.

 

Thanks

Barry

[billygoat24]

On 1/19/2023 at 2:53 PM, Noel C said:

Perfectly acceptable to say "Sale of property at the end of term". I have 3 properties, all on interest only. Never had an issue with a lender accepting that as a repayment vehicle. 

 Do I have to provide them with this information now?